You may be wondering why bank mergers need to be regulated in the first place. There is a great concern among state and federal governments that too many banks merging together could lead to a decrease in competition and the domination of the market by one bank for which it could fix all prices and rates and decide who gets what loans and which services.
The Bank Merger Act prohibits any merger that would have the affect of lessening competition among banks to such an extent that there could be price and rate fixing especially in the instance of a total monopoly by a bank in a certain area.
There are different bank regulatory agencies that monitor and regulate mergers between banks based on what the affect on competition will be. Which regulatory agency is monitoring the bank depends upon what kind of bank it is:
- The Office of the Comptroller of Currency (OCC) monitors national banks
- The Federal Reserves Board regulates state member banks and holding company transactions
- The Federal Deposit Insurance Corporation (FDIC) regulates nonmember insured banks
After there has been a review of the merger by a regulatory agency, the Department of Justice also does there own antitrust evaluation of the merger.
It is you, the customer, which is primarily affected when banks merge together. When two banks come together to form one, the customers of one or both banks may have to deal with getting new ATM cards, account numbers, and even new persons who will take care of your account.
Those are only the minor hassles. The major worry is that because of reduced competition customers may incur larger fees for various bank services. When two banks merge in an area, it is not uncommon for small business owners to be concerned because they generally fear it will result in a reduction of quality of services from their bank, as well as higher fees. These changes affect all customers of the emerging banks and so all customers should be aware of potential mergers and their consequences.
There is plenty of literature out there about antitrust laws and there impact on you and the economy in general. If you wish to find out more about your rights under antitrust laws as well as your rights as a bank customer, you may want to consult an attorney with experience in accounting and finance matters. A business attorney can advise you of your rights and let you know what protections you have under the law as a bank customer.